Sudden wealth

[swsyndrome]

Hi
First time posting in this section of Mumsnet. Have previously posted elsewhere. NCed for obvious reasons.

Want to post anonymously because it's difficult to talk to RL friends about this.

Basically we've recently become quite wealthy on paper and have cashed out a few hundreds of thousands of pounds which is a fraction of the total potential wealth. Before this we are pretty middle class young professionals. Not badly off but not wealthy either, own our property (London) but live from pay cheque to pay cheque paying mortgage etc, with a little cash saving and some long term investments.

Before this happened, I would've thought it would be amazing to have so much so we could have some indulgences, but it's incredibly weird. I have told a few closest friends but some of them get weird so the conversation doesn't continue. Certainly can't share with wider social circle because I don't want things to be weird, and want to protect privacy as well. People who haven't experienced it probably see it as completely positive but in reality as I've found out, I've also experienced guilt and isolation. Also feel confused about how to invest and how to think about our new situation. I've googled it and found that there is even a term called sudden wealth syndrome.

We've consulted independent financial advisors and have some ideas about investing the cash we got. Will put some money aside for children's education and will spend an amount to treat ourselves and give some away to charities we cherish. It still doesn't take away the weird feeling. Neither of us are silly spenders. Generally frugal and wouldn't spend money on flashy handbags, cars etc.

It's even more weird because aside from the money we cashed out, the remaining wealth on paper can also be gone any minute if things don't go well (E.g. economy crashes etc).

I'm not sure what I'm looking for here. Certainly not sympathy because I know we are incredibly lucky. Would be nice to hear any similar experiences and also suggestions on how to adapt to a new reality and manage the new wealth sensibly.

Thanks a lot in advance

One piece of advice though is don’t be shocked by big numbers. Having £7M invested, £19M invested is not that unusual.

Don’t get tempted to wrap it all in property though. That will definitely cause tax and liquidity issues down the line. Property is just another asset class (beyond the home purchase) and should not massively imbalance to total portfolio.

What company were the shares from? (Well if you don’t ask...!) 😁

Needausernamegenerator
Yes it does feel like I'm keeping a secret or something, but it's just not a topic that comes up. Thanks for sharing your experience

Thank you yeahyeah for the sound suggestions

Doodlejump even if I say I doubt you would've heard of it:)

Congratulations, have some fun and keep your mouth shut, people will gossip if told x

Don't suppose you'd pay off my credit card bill (worth a try!) 😀

No real advice but I hope you really enjoy yourselves! Sounds wonderful.

Repeat 'I am thankful for this opportunity' when you feel overwhelmed by it. Don't take any stress from it & spread your portfolio if you value more security. Congratulations!

Fancy chucking a £1,000 my way!

I would consider cashing out the shares and investing in all market funds (did your financial advisor talk about this?) Over the long term the markets do grow, over the short time they fluctuate. You just need to know that's a fact and not panic.

Remember, you don't need to make any decisions or spend any money right at this second! There is loads of literature on personal finance that might help. Try googling 'Financial Independence UK' - there are all sorts of books and even blogs that are reputable and will give you a headstart. Now is also the time to think about what you really want from life. Money won't solve that for you, but if you have an idea generally it'll help you use the money as a tool to get you there.

If it were me (not a financial professional!) I would:

• Not tell anyone
• Engage an independent financial advisor and a well regarded tax professional
• Ensure I'm maxing out all tax sheltered accounts I can (e.g. S&S ISAs for you and kids and pension funds where applicable - but be aware of the tax implications if it's projected to exceed 1m)
• Pay off mortgage (not technically the most sensible thing to do, but certainly not the worst - and brings great peace of mind)
• Invest the rest in whole world all market funds
• Set up a new budget to 'automate' money - X amount to savings, X amount giving etc.
• Then focus on other things (do you want to go back to uni? travel? run a marathon?) and get on with my life :)

As someone who works in high end luxury fashion my advice would be to not over think or dwell on this sudden wealth too much. Money has an interesting way of changing people and those around you. Ultimately make it work for you and get on with your life. You now have choices and options that many do not, how you chose and use them will shape your future.

That’s great news. I know many lottery winners do say although you expect to be elated to come into a large sum of money, it’s not quite as easy as that.

I’d get some professional advice. It will cost you but it will be worth it - it sounds like you’re a bit out of depth and they deal with this kind of thing all the time.

Enjoy!

PS I agree with the comment you don’t need to do anything yet. Stick it into savings for a year or so and have a good think about what you want to do, eg moving house, private education for children etc etc. Enjoy your holiday and then take some time out to let it all sink in

I can understand the feeling of anxiety OP. You've gone from living from month to month to not having to worry. And that itself is a worry, as it must be replaced with a "what if it all disappears" concern!

You sound like you've been very sensible. For some "safe" investing - how about a lump in Premium Bonds?

As for your friends, tell people that you trust but don't expect long conversations about it unless anyone else is in a similar situation or works in the finance/investment sectors. Friends may feel awkward either because they're jealous or they just don't have any experience or knowledge of what you should do. Money does funny things to people. Some good (like you with your big donation - well done!) and some bad unfortunately.

My only advice is to not think about the future share options (I'm assuming) that you have. That paper wealth means nothing. I learnt the hard way, I worked for Societe Generale back in the mid 00s, had done well and had options going forward 3 years worth a bit. Then Jerome the rogue trader does his thing and it all falls apart overnight, worth nothing. Otherwise, good luck!

Hi OP,

Congrats on the windfall, it can be freeing to have financial security and help remove some general life stress.
DH and I have some reasonable savings from not giving in to lifestyle creep and I enjoy the peace of mind knowing if one of us loses our job or we needed to make a big purchase (fixing or buying another car etc) it's not an issue.

Have you ever been on reddit? There are some great financial subreddits e.g reddit.com/r/UKPersonalFinance , reddit.com/r/FIREUK that can have good general guidelines about setting up your own financial and investment plan depending on savings and amounts you have.

Someone I know had a windfall of a few million recently, similar positions to you

They are staying in their house but clearing mortgage and buying bespoke hand made furniture,
Putting all children through private school for life and buying a holiday cottage by the sea

DH and I recently came into a good sized sum from his mum as she adjusted her estate planning, about USD 200k. In our case what to do with it was easy - half went to university costs for our two DC and the rest split between clearing our mortgage and a new roof for our house.

It was still unnerving to have such a change in circumstances in a matter of days. We discussed it with the kids, since they will be directly benefiting from it, but no one else.

As others have pointed out, unvested or underwater stock options are a very iffy thing. So focus on what you have now and proceed cautiously and with proper professional advice. Depending on your assets available for investment you may qualify for private client status at come banks for financial companies.

Focus relentlessly on costs when investing. The fees can rob you blind over time and get taken out whether you're making money or not. There was some very good discussion and information on investing here recently:

www.mumsnet.com/Talk/_chat/3672111-Talk-to-me-about-investing-please

You'll feel much more settled about it in a month or two.

Congrats 😎
Deffo pay off the mortgage
Vanguard low risk funds, I wouldn’t be 100% equity at this stage.

My best advice is to not tell anybody. Obviously when I bought a Porsche with cash and multiple properties etc my friends knew I was well off. However unless you tell somebody how much and boast about finances (like buying very very very expensive cars designer bags etc which I did at first and found out who wants to use me for money) then people don’t really get dollar signs in their eyes and just assume you’re well off but not royal wealthy.

In my new young wealth (I am 27 and we’ve been wealthy for 4 years now) I QUICKLY found out who my true mates were... who only talks to you about their money issues to get you to foot the bill etc

So first steps with money is to be debt free. Pay off all debts. Pay off your home cars etc and what not. You’ll save money long term just doing that

Thanks for all the comments.
It's been a while since I posted but feel like it would be nice to do a little update.

Since the post we've cashed out more shares, enough to pay off mortgage completely with leftover, though we've decided to put it in various mutual funds, real estate funds, ISAs and savings as they earn higher returns than what we pay on our mortgage.

Psychologically and emotionally more used to it now. Most days I don't dwell on it. One significant change is that I no longer worry about costs when it's something that would be helpful in our busy lives (like cab rides, cleaner/gardener/babysitter etc), or an enriching experience, either an art exhibition or a west end show or a holiday that we would've hesitated or saved up for in the past.

Having the financial backup has allowed me to take more risks in setting up my own business. I was afraid of not making profits before and was more focused on finding a more financially rewarding path, whereas now I'm more focused on finding an emotionally rewarding career path.

Another change has been our actions towards the big issues in the society and donate small amount of money wherever it feel appropriate. For example when we fly we would put in a donation to environmental charities to offset our carbon footprint. I've invested in more environmentally products in our home and can now afford to do so.

I used to worry about losing the value of the rest of the potential wealth, but I've come to a point now that I appreciate the leg up it has given us (and our children) already. Even if the rest is all gone tomorrow, I feel very lucky and I know we'd be more than comfortable.

The biggest downside is friendship still. We are naturally liberal-minded people and our friends tend to share similar views. It's difficult to feel like we are standing on "the other side" now. Particularly since we haven't moved or done anything flashy, no one really knows, so when my friends freely discuss how disgusting the 1% is able to have that much money, it pains me somewhat. I agree with them and I believe in a more equal society which makes me feel quite guilty and somewhat hypocritical.

It's an interesting journey and I'm really grateful and overall just trying to both live a more fulfilled life and also help the society and the planet in ways we could. I'd like to move more towards a reconciliation between my ideology and our current situation. Perhaps that will come with time.

Interesting final post. I’m similar in that quite recently my reasonably good salary (high 5 figures) has almost doubled and it’s left me feeling very strange. I’m sure my parents have no idea, my mum was surprised to learn in a higher rate tax payer (crosses that bridge a loong time ago!!). I also plan to make large regular donations to charity and largely maintain my current lifestyle, except I can be more relaxed about money decisions and the significant amount I spend to make working life manageable - it’s nice to look back and feel it has been worth it back when I earned less and questioned the expenditure, and now I can more easily afford it.

Life’s twists and turns! Who knows what the future holds so I’m grateful for our current circumstances and I’m trying to make sure I’m giving back to society and that what goes around will keep coming around...